K12 Inc.’s stock price drops after Wells Fargo downgraded its rating in response to the poor performance of K12’s Colorado Virtual Academy, where the graduation rate is 22 percent.

Now a rating agency finds that despite the passage of an ALEC-style amendment in Georgia, allowing a gubernatorial commission to open charters over the objections of local school boards, and despite a likely charter victory in Washington State, the charter sector as a whole is a risky investment. Read the analysis here.

Hey, is any of this about education or just about increasing market share and profits and return-on-investment?

One of the things that happens when too much money gets in the hands of too few people is they speculate.

This is overt gambling on privately traded public education.

Diane, you are probably aware of how student loans are securitized. Here is a report that gets into the bubble that exists for that market, complements of banks and the private loan industry, led by Sallie Mae.

Charter schools serve a purpose that goes beyond their backer’s expectations of future profit opportunities, serving an important ideological and function for the privatization movement: as vehicles for consumer “choice” rather than democratic rights, a model for a low-cost workforce, a place to test methods and embrace fads for training a future workforce. Those things have currency for corporate reformers.

Anyway, look at Edison. It’s a zombie company, having virtually never earned a profit, yet Mr. Market has never been willing to drive a stake through its heart.

The hostile takeover of the public schools is being conducted by very clever, far-seeing people, and they don’t face the same quarterly bottom line pressures that typical CEOs do. Part of the reason for that is because taxpayers are in effect subsidizing much corporate education reform, by allowing corporate and personal interests to be served via non-profits.

They know the tremendous opportunities represented by siphoning off public education dollars, and they will subsidize charter schools, even absent short term profit opportunities, if the schools can help them sink their fangs deeply into the long term budget stream.

“For its part, K12 Inc. posted a response regarding its ongoing action plan at Colorado Virtual Academy, which pointed to challenges stemming from changing demographics at the school:

While growth in at-risk populations is a phenomenon increasingly affecting public schools across the country, the growth in this cohort in COVA appears disproportionate to other schools we manage. This influx has required extensive changes to an intervention model there, an adjustment which has proved difficult for some teachers in the short term and also contributed to a reduction in parent satisfaction to a level below the near-90% range characteristic of other K12-managed schools.”

It appears they are saying that they are having to deal with “at-risk populations” more and more and blame it on the increasing “growth in this cohort”. Duh, public schools have always dealt with “this cohort”. What, they aren’t being allowed to cherry pick anymore???

Notice that they had “extensive changes to an intervention model”. Oh, I get it, they don’t know how to teach to that cohort, eh. But notice where the blame is placed “an adjustment which has proved difficult for some teachers. . . [which] has contributed to a reduction in parent satisfaction to a level [blah, blah, blah]. . . ;” Yep, IT’S THE TEACHERS FAULT.